After a 125% rally in 4 months, JP Power shares tank 8% today; here's why?

Shares of Jaiprakash Power Ventures have been on a roll lately amid the rising buzz of its acquisition by leading conglomerates with Adani Group, Vedanta and Dalmia Bharat Group as the front-runners of the race. There is nothing official, but there has been a strong buying interest in the stock lately. However, the stock saw a sharp profit booking today.

Shares of Jaiprakash Power Ventures (JP Power) tumbled nearly 8 per cent during the trading session on Tuesday, falling 7.82 per cent to Rs 25.09. The total market capitalization of the company stood slightly above Rs 17,000 crore mark. The stock hit its 52-week high at Rs 27.62 on Monday, but fell more than 9 per cent from those levels.

The recent rally in JP Power was major driven by reports that the Adani Group had submitted a bid to acquire the debt-laden Jaiprakash Associates, its parent company via a corporate guarantee on a $150 million external commercial borrowing, which was later converted into a rupee loan. Jaiprakash Associates is undergoing insolvency proceedings.

Before this profit booking today, shares of Jaiprakash Power Ventures have soared nearly 25 per cent in the last one week, while it has soared more than 56 per cent in the last one-month period. The stock has zoomed nearly 125 per cent from its 52-week low at Rs 12.35, hit four months ago, on March 03.

The stock has seen a strong trading volume as more than 3.19 crore equity shares of the smallcap power generation player exchanged hands on BSE as of 11.15 am. The value of these shares stood close to Rs 82.8 crore. However, this is less than two-week average quantity of 4.94 crore shares being traded on the exchange.

Jaiprakash Associates is promoter of JP Power and held 24 per cent stake in the company as on March 31, 2025. The remaining 76 per cent stake was held by the resident individual shareholders (38.85 per cent), banks including ICICI Bank, UCO Bank and Canara Bank holding up to 15.71 per cent stake collectively. FPIs own 6.04 per cent while other bodies corporate held 5.08 per cent stake.

Commenting on the technicals, Shiju Koothupalakkal, Technical Research Analyst at PL Capital, said that the stock has shown a strong surge, forming a bullish candle on daily charts and he see potential upside targets at Rs 31.40 and Rs 36.70 in the coming days, with Rs 24 acting as a key support from the current price.

Drumil Vithlani, Technical Research Analyst at Bonanza, believes that the broader trend remains positive. "One can consider trailing the stop-loss to Rs 23 and continue holding the position, with potential upside targets of Rs 30 and Rs 33 in the coming months," he said.